David Cameron warns Brexit could cost jobs and force up prices

David Cameron has led a concerted government effort to ramp up warnings about the cost of leaving the EU, telling workers their jobs could be at risk and the prices of holidays and basic goods could rise.

As the foreign secretary, Philip Hammond, told the House of Commons that the UK economy would be “put on hold” for up to two years if there was a vote to leave the EU, the Vote Leave campaign accused ministers of scaremongering while failing to defend their “trivial deal” achieved in Brussels last week to reset the terms of UK membership.

But the founder of Virgin Atlantic, Sir Richard Branson, echoed the government’s warnings, saying there would be “devastating effects” on low-cost airlines such as Ryanair and easyJet.

Branson told the BBC News channel: “I am very worried about the pound, which is now taking a pummelling with people worried that Great Britain might actually pull out. And for the long-term future, I think it would be a frighteningly retrograde step. So all I can do is hope that common sense will prevail in four months’ time and that people will agree to stay.”

For the first time since setting 23 June as the date of the EU referendum last Saturday, the prime minister backed the claim by the Britain Stronger in Europe camp that shop prices could rise.

Speaking to workers at BAE Systems in Preston, Lancashire, the prime minister also echoed the warning of easyJet’s chief executive, Carolyn McCall, that the EU has benefited holidaymakers by driving down the cost of flying.

Cameron said: “I think there are some retail points we should focus on. Since we joined the EU, the cost of flights, the cost of holidays, has come right down. That’s something we benefit from.

“We’ve also got to think about the issue of the prices in our shops. Being part of a single market keeps our prices down. I think there’s a real risk that, if we leave, we would see fewer jobs, less investment and higher prices.”

Asked directly if leaving the EU would threaten jobs at the defence company, which employs thousands of people in the UK, he said: “I am saying that we are better off in a reformed European Union. I think jobs would be at risk; there are three million jobs that, in some way, depend on our trade with the European Union.”

Leaving the EU would complicate defence cooperation with countries such as Italy, France and Germany, Cameron said. “The more partnerships we have, the more we are likely to maintain and enhance our skills base here in the UK.”

Brexit would not technically take the UK out of the Typhoon programme or other collaborations, he said, ”but I think it would make it more difficult because the fact is, sitting around that European Union table with the French, the Germans and the Italians, that is where we have many of these conversations. And so it could put a risk some of the defence collaboration we have today”.

Hammond reinforced the prime minister’s warnings. “A vote to leave is a vote for an uncertain future. Indeed, the mere possibility of a leave vote will have a chilling effect on business confidence even before the referendum,” he said.

The foreign secretary said that, during a two-year period to negotiate Britain’s exit, the government would not be able to offer any assurance to businesses about their future access to EU market and have “nothing to say” to overseas investors looking for a base from which to trade with the single market. “That would be truly a leap in the dark and the effect would be to put the economy on hold until the negotiations were completed,” he said.

Hammond followed the prime minister’s lead in mocking London mayor Boris Johnson’s apparent support for a second referendum. “No individual, no matter how charismatic or prominent, has the right or the power to redefine unilaterally the meaning of the question on the ballot paper,” he told MPs.

Matthew Elliott, the chief executive of Vote Leave, said: “The PM has spent the last week doing nothing but scaremongering while avoiding answering questions about his trivial EU deal. The public don’t want another four months of ‘project fear’ from a PM who failed to deliver on his EU promises to the British people. Outside of the EU, we can take back control of our borders, economy and democracy cutting prices and boosting trade. The safe option is to vote leave.”

Powered by Guardian.co.ukThis article was written by Rowena Mason and Nicholas Watt, for theguardian.com on Thursday 25th February 2016 20.01 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010